Media comments inappropriate, banking inquiry tells Nama

The National Asset Management Agency has been rebuked by the chairman of the Oireachtas Banking Inquiry for comments it made to the media about evidence given by Cork property developer Michael O’Flynn.

Mr O’Flynn told the inquiry on July 22nd he had been subjected to “very significant pressure” by Nama to sell a property in London to a particular bidder for a price lower than was offered by another bidder.

This matter was subsequently overtaken by the sale last year by Nama of Mr O’Flynn’s loans to global investment group Blackstone.

Following Mr O’Flynn’s appearance, Nama issued a statement responding to his claim about the London deal. Nama said his contention was untrue and this was covered by two Sunday newspapers.

“The property was openly marketed through a property agent appointed by Mr O’Flynn,” Nama said. “Mr O’Flynn formally recommended to Nama that the property be sold to the highest bidder to emerge from that open-market sales process, on the agent’s guidance that the price achieved set a ‘new record yield’.

Third party

“Mr O’Flynn subsequently recommended the sale of the property to another third party who had not participated in that open-market sales process. The sale of the property did not proceed.”

Mr O’Flynn then wrote to the committee and complained about Nama’s statement to the media and sought to appear before the inquiry again to defend his evidence. It is understood he wrote two letters to the inquiry on the matter.

The committee declined this request but its chairman, Ciarán Lynch, wrote to Nama on July 30th to remind the State agency of its obligations as a witness to the inquiry.

Nama chairman Frank Daly and chief executive Brendan McDonagh gave a full day of evidence to the inquiry on April 22nd, kicking off the Nexus phase of its investigation.

Without making any judgment on the dispute, Mr Lynch told Nama in his letter it was “not appropriate for any witnesses who have given sworn evidence to the joint committee to engage with media outlets with regards to any other witness’s sworn evidence”.

Perjury

A spokesman for Mr O’Flynn declined to comment on his contact with the inquiry. He said media reports the Cork developer was considering legal action against Nama for effectively alleging he had committed perjury in his evidence were wide of the mark. “I can absolutely confirm that Michael O’Flynn has no intention of taking any legal action against Nama in relation to this matter,” he said.

A spokesman for Nama declined to comment on the row.

Relations between Mr O’Flynn and Nama have been strained since the agency rejected his business plan to repay the group’s €1.8 billion in loans in full before selling them on to Blackstone in 2014 at a discount. “We continue to owe Blackstone the full par value of the loans,” Mr O’Flynn told the inquiry. “The discount taken by Nama on the sale of the loan has cost the taxpayer but could have been avoided had Nama been prepared to work with us and to take our business plan on board.

“We are fortunate that following the resolution of our dispute with Blackstone we still have a business, albeit a smaller one, one which we are building up again and contributing to the economic growth of the country.”